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Entries in Savings (21)

Friday
Feb222013

How to Save Money on Family Movie Night

Creatas/Thinkstock(NEW YORK) -- Treating yourself or the family to a night of entertainment can be a pricey venture, but there are ways to keep more money in your wallet.

The average American family spends $1,367 per year on fees and admissions. Spending on entertainment defined more broadly tops $4,086, which is a fair chunk of change.

For the Alena family of Princeton, N.J., movie night has become a regular family event.

“Every time there’s a new kid’s movie, we’re there within the opening week,” said Minda Alena.

But when you add in concession stand snacks and dinner, those blockbusters can turn into huge budget busters.

“It can get very expensive,” said Bill Alena. “Well over $100.”

 

To find out how to save on your next outing, ABC News enlisted family finance expert Farnoosh Torabi to pay the Alena family a visit, armed and ready with some real money secrets.

1. Buy your movie tickets in bulk, in advance.


You don’t have to stand in line. Buy your tickets online at the movie chains themselves or at warehouses for much less. On a recent trip to Costco, ABC News found discounted movie tickets priced at $15.99 for two people. Based on the Alena families’ local box office price, that saves their family 20 percent.

2. Maximize your club memberships.


Many theatres offer membership affiliation discounts that can add up to big savings. For example, one theatre offered 30 percent off with an AAA membership. But you have to call AAA.

3. Buy unwanted movie gift cards for a steep discount.


Gift cards can be used for tickets and concessions. Experts told ABC News that is where markups can be upwards of 1,000 percent. To find discounted gift cards, visit Plasticjungle.com or giftcardgranny.com.

The Alena family spends roughly $2,600 a year on movies, including snacks and dinner. By taking advantage of some of these tips, ABC News’ experts estimate they can save upwards of 30 percent, or $780.

Copyright 2013 ABC News Radio

Wednesday
Jan022013

Federal College Savings Plan Primarily Helps the Wealthy, Study Finds

iStockphoto/Thinkstock(NEW YORK) -- A federal plan meant to help families save for college tuition is overwhelmingly benefiting wealthy families, a federal review has found.

The financial instruments, known as 529 college savings plans, contribute to a billion dollar industry but are utilized by less than 3 percent of families with college students, according to a study released last month by the Government Accountability Office.

And those families, the GAO found, were almost exclusively wealthy.  Families that did have a 529 plan or a similar investment vehicle for college savings had 25 times the median financial assets of families that did not and three times the median income, the GAO said.

Although 529s were created to help families of all income levels be able to afford college, Laura Lutton, director of 529 plan research for investment firm Morningstar, said, "This research suggests that's not the primary use of the plans."

The plans, named after Section 529 of the Internal Revenue Code in 1996, allows parents or grandparents to set up a savings plan for a child right at birth.  In 2001, the federal government allowed distributions from 529 accounts to be entirely tax-exempt if used to pay for college tuition and fees, which have been increasing at a rate of 6 percent.

Lutton said it will be interesting to see how lawmakers in Washington respond to the report.

The foregone federal revenue from college savings plans is about $1.6 billion, according to the Treasury Department in the fiscal year of 2011.

"The fact that wealthier families are taking advantage of these in larger numbers shows it's not a vehicle that is as widely used as many would think as a goal in the industry," Lutton said.

Lutton said she was not entirely surprised by the GAO's report, as she had heard anecdotally about the average account size and customers.  She also said previous research showed that about 51 percent of 529 plans are sold directly to individuals while 49 percent are sold through a financial adviser.

"If you are working with a financial adviser, there are some financial means there.  If that's half the assets in the industry, I think one could logically conclude that is why you see so many wealthy families utilizing the investments," Lutton said.

The report points out that higher income households tend to benefit more from the tax-free earnings from a 529 plan because of their higher tax rate.

The GAO report said that some of the primary reasons preventing families from participating is their ability to save, awareness of 529 plans as a savings option and difficulty in choosing a plan.

In addition, some families are concerned that saving greater amounts of money for college may impact potential financial aid for their child.

Copyright 2013 ABC News Radio

Tuesday
Oct162012

Morningstar Lists Best 529 College-Savings Plans

Hemera/Thinkstock(NEW YORK) -- Investment ratings firm Morningstar released its annual ranking of 529 college savings plan on Monday, noting industry-wide improvements in plan fees and performance.

Almost every state offers a 529 savings plan, named after Section 529 of the Internal Revenue Code, describing how those who contribute to these investment vehicles don't have to pay taxes on proceeds.  Benefactors, such as parents and grandparents, can start a plan for named beneficiary as soon as a child is born.

While you do not have to choose a 529 savings plan offered in your state, many states offer tax breaks if you do invest in their plans.

Laura Lutton, director of Morningstar's fund research group, said if you are going to consider a 529 savings plan for a child, it's best to start early, given the accelerating cost of college and the fact that there are relatively few years to save, compared to retirement or other savings goals.

If you live in a state where there are tax benefits, in most states you'll give up those benefits if you choose another state's 529 plan.

Only five states allow you to apply that state's tax benefit to any 529 plan, regardless of its origin.  Those states are Arizona, Kansas, Maine, Missouri and Pennsylvania.

Morningstar.com's 529 Plan Center features an interactive map that lists each state's plans and its tax benefits.  For example, Ohio has two 529 plans that offer $2,000 in-state tax deductions for single or joint filers.

This year's list of the best plans are described by a new ranking of gold, silver, bronze, neutral and negative to match Morningstar's analyst ratings for mutual funds, so the descriptions can be more clearly interpreted for different investment vehicles, a spokesman said.  In previous years, Morningstar rated ranked plans in several tiers: top, above average, average and below average.

The rankings are based on characteristics like price and performance, which allow analysts to estimate which plans are more likely to outperform over the long term on a risk-adjusted basis.

The 27 plans that received medals represent more than 95 percent of the $162 billion in 529 plan assets in the country.

Here is a list of the four gold plans and four silver plans Morningstar selected this year:

Gold
T. Rowe Price College Savings Plan
Program Manager: T. Rowe Price Associates, Inc.

Gold
Maryland College Investment Plan
Program Manager: T. Rowe Price Associates, Inc.

Gold
Utah Educational Savings Plan
Program Manager: Utah Educational Savings Plan

Gold
The Vanguard 529 College Savings Plan
Program Manager: Upromise Investments, Inc.

Silver
iShares 529 Plan
Program Manager: Upromise Investments Inc.

Silver
Michigan Education Savings Program
Program Manager: TIAA Tution Financing, Inc.

Silver
CollegeAdvantage 529 Savings Plan
Program Manager: Ohio Tuition Trust Authority

Silver
CollegeAmerica
Program Manager: American Funds

Copyright 2012 ABC News Radio

Friday
Sep142012

Financial Situation for Unbanked Worsened, Report Says

Hemera/Thinkstock(NEW YORK) -- The number of unbanked households in America -- those with no bank accounts -- has increased since 2009, a new study shows.

Ten million households, or one in 12, are unbanked, said the Federal Deposit Insurance Corporation (FDIC) in its National Survey of Unbanked and Underbanked Households, using 2011 data, the second survey of its kind.

The number of unbanked households increased since the FDIC’s first survey in 2009, growing 0.6 percentage points to 821,000.

Meanwhile, 20.1 percent of U.S. households are underbanked, meaning they have a checking and/or savings account but have used non-bank money orders, non-bank check cashing services, remittances, payday loans, pawn shops and other non-traditional banking means.

“It’s significant and positive that a respected public agency continues to track and study the issue of financial inclusion and, in this case, to note that the problem has, if anything, grown worse since its landmark 2009 study,” said Timothy Flacke, executive director of the nonprofit Doorways to Dreams (D2D) Fund, which makes financial products for low- and moderate-income consumers.

Flacke said the FDIC study highlights a basic fact, that “those who are disconnected from the financial system are at a significant disadvantage in trying to save and build financial security.”

The report says almost a third of U.S. households, 29.3 percent, do not have a savings account.

Flacke said that is one reason why his non-profit organization, based in Allston, Mass., supports the U.S. Savings Bond program, especially for those who are not connected or fully connected to the private financial system.

He said the FDIC study also highlights the need for innovation to make sure more people are included in the financial system.

That is reflected in the Treasury Department’s recent decision to run a public challenge, called MyMoneyAppUp, in partnership with D2D Fund and the Center for Financial Services Information, to encourage new mobile technologies to increase financial access.

The challenge asked the public to submit ideas to help Americans “shape their financial futures” for cash prizes up to $10,000.  Winners of the challenge will be announced on Sept. 28.

Copyright 2012 ABC News Radio

Friday
Jul062012

Mass. Man Pays Off Mortgage with Pennies

Photodisc/Thinkstock(MILFORD, Mass.) -- A Milford, Mass., man saved his pennies to pay off his mortgage -- literally. He carted more than 62,000 pennies to the bank to make his last payment.

"Thirty-five years ago when my wife and I took out our mortgage for our first home I happened to pick up a penny in a parking lot," Thomas Daigle told ABC News. "I said, I'm going to pay our last mortgage in pennies.'"

And, that's exactly he did. In all, that's about 427 pounds of pennies at 145 pennies to the pound, though pennies minted after 1982 weigh in at 181 to the pound. Daigle says he didn't weigh them.

The 60-year-old, who would place his change and keys in a bowl each night, would sift through the change and save his pennies. On a rainy or snowy night in central Massachusetts, Daigle would roll three to five packs of pennies and place them in a box in the basement. Along with the pennies in a box downstairs, Daigle would keep a scrap of paper with a running tab of the amount of rolls stored in the boxes downstairs.

"After a few years of rolling pennies, I said this is a doable thing to pay my mortgage off in pennies," said Daigle.

In April, the co-owner of Joseph and Thomas Opticians brought the boxes of pennies around to the back at Milford Federal Savings and Loan Association and made his final payment on his 35th wedding anniversary.

Daigle warned the bank before coming in with the coppers. A long-time customer, Daigle opened a savings account at the bank when he was 10 years old using money he made from mowing lawns. At the time, one of his lawn customers was a teller named Mary, who worked at the bank.

"When it was time to get married and buy a house, this is the bank we wanted to use," said Daigle, who married his high school sweetheart Sandra in 1977.

"We're a local community bank and we've been in business for many years," a spokesperson for Milford Federal Savings and Loan Association told ABC News. "We are celebrating our 125th birthday this year."

Thomas Daigle "has been a customer of ours for a very long time and we were very pleased that he was able to accomplish his goals. It was a proud day for him. We are happy about that," the spokesperson continued.

He said his wife Sandra merely shakes her head and says "that's my husband," when asked about the penny savings.

"I'm a man of my word and I'm a man of commitment," said Daigle. "There is one thing you have in life: it's your word. If you say you're going to do something, do it."

Daigle says he's no longer saving pennies. "I never saved anything in my life other than pennies," he added. While coming in to the office, Daigle says he stumbled upon a penny and picked it up. He said he's hoping his lunch total is an odd number so that can get rid of it.

"I'm saving nothing," said Daigle. "I'm not leaving my children with any kind of mess to clean away."

He continued, "I'm collecting grandchildren. I have four grandchildren. I live for them."

Copyright 2012 ABC News Radio

Friday
Feb102012

Valentine’s Day Savings: 20 Ideas to Spend Less

Hemera/Thinkstock(NEW YORK) -- While the origins of Valentine’s Day show it as a day to celebrate love and romance, today, centuries later, it’s a day as much about spending money on your loved ones as it is about showing them your love.

Last year, couples spent $1.7 billion on flowers, $3.4 billion on dining out and $3.5 billion on jewelry, according to a survey released by CouponCabin.com.

Men spent about $160 on their valentine, while women spent nearly $75 on theirs, the survey found.

And this year, total spending will hit $17.6 billion, according to the National Retail Federation.

Despite the statistics, showing your love doesn’t mean you have to blow your budget.

Try these 20 low-cost ideas for turning your Feb. 14 back into a celebration full of love, not an empty bank account.

  • Take a hike or a walk on the beach, or just get outside to enjoy whatever environment in which you live.
  • Treat your loved one to breakfast in bed.
  • Make paper flowers full of heartfelt messages your loved one can keep instead of spending money on real flowers that will wither.
  • Make a CD of you and your loved one’s favorite love songs.
  • Turn loose photos and memorabilia into a scrapbook documenting your relationship or a special time you shared together.
  • Create a coupon book of tasks or special things you’ll do for your loved one throughout year.
  • Make it a movie night in to avoid the crowds and curl up with popcorn and your favorite classic.
  • Go on a picnic and make it elegant with candles and a tablecloth.
  • Make something homemade for your loved one, such as jewelry or a painting or a collage.  Even if you don’t think of yourself as crafty, just a homemade card made with your best efforts will be appreciated.
  • Try something new together like a dance, art or music class.
  • Check with your neighbors and friends about going in on a group babysitter so the kids can have a fun night together while the adults get a night off.
  • Make your loved one’s favorite homemade meal instead of dining out at a pricey and likely crowded restaurant.
  • Create a DVD of your favorite memories together.
  • Search online daily discount and coupon sites for special deals on restaurants or activities in your area.
  • Give your loved one a massage and a basket of soaps and lotions in his or her favorite scent.
  • Celebrate a day, week or even a month later so that you can avoid holiday price hikes and take advantage of restaurant, travel or shopping deals down the road.
  • Find a free activity like an art show, park or public concert in your area to enjoy.
  • Write a love letter.  Paper and pen are cheap, the tradition never gets old and you can’t beat a truly heartfelt gift.
  • Commit to shortening the “honey do” list that may have been building since last Valentine’s Day.
  • Turn an old shoebox or other container into a keepsake box and start the collection off for your loved one by including a few special mementos.


Copyright 2012 ABC News Radio

Friday
Feb032012

S.M.A.R.T. Ways to Increase Your Personal Savings

Comstock/Thinkstock(NEW YORK) -- If you find yourself already falling behind your New Year’s resolution to put yourself in better financial shape this year, you’re not alone.

Saving money and making smart financial decisions are attainable goals but, more often than not, people fall short and end up having trouble making ends meet.

Fortunately, there are smart and easy steps you can take to get your financial life back on track.

Alexa Von Tobel, founder of LearnVest, a financial and money-management site geared towards women, spoke with ABC News about her site’s S.M.A.R.T. money management program.

Von Tobel says using the five steps -- Smart, Measurable, Attainable, Realistic and Timely -- outlined below will increase your savings and empower you financially.

video platformvideo managementvideo solutionsvideo player
S -- SPECIFIC.  Make specific goals with your financial resolutions.  Von Tobel says to look three to five years into your future to figure out what you are trying to achieve.   Are you trying to save for a home, or a child, for example, or maybe just a specific amount of money?

“Back into what you need to achieve this year in order to get there, and then come up with one specific number,” Von Tobel says.  “Create a specific number and know it.”

M -- MEASURABLE.  Von Tobel says it’s important to make your goal(s) measurable and to narrow them into smaller, or what she calls, “micro goals.”  If you want to save $10,000 this year, for example, you need to save about $1,000 per month.

“Make smaller numbers that you can measure so that every single month you can know where you’re achieving and know that you have very simple smaller numbers that you can use to measure progress,” she says.

A -- ATTAINABLE.  This step is crucial for setting expectations and ensuring that you know the steps you need to take to achieve your savings goal(s).

“If you are making these goals, I want you to figure out how you’re going to attain them,” Von Tobel says.  “I want you to step back and say, ‘If I’m trying to save that $10,000, where am I going to cut it from my budget?”  Am I going to save an extra $200 per week, and how is that going to happen?’”

R -- REALISTIC.  This fourth step is an important aspect in setting expectations for yourself so you don’t set goals that are not achievable and then abandon them completely when they’re not met.

“If you go through and realize that there’s just no chance that you can save $10,000 and the number is more like $5,000 this year, then set a realistic goal,” Von Tobel advises.

T --  TIMELY. This final step requires that you set mini check-ins for yourself and your goals, and is the most important of the five steps, according to Von Tobel.

“If you’re trying to save $10,000 this year, what do you need to do every single two weeks, or what do you need to do every single month?” she says.  “Set a number that you’re trying to achieve and check in with it.”

Copyright 2012 ABC News Radio

 

Monday
Jan232012

Coffee, Lunch Spending Tops Tax Refunds

Gerald Zanetti/FoodPix(NEW YORK) -- Want to save $2,000 a year? Pack your lunch. Wanna save another grand? Fill a thermos with coffee while you’re at it.

The average amount working Americans spend on coffee and lunch is more than the average tax return refund they will receive, with two-thirds of American workers buying their lunches, according to a survey by Accounting Principals, a staffing and recruitment firm. The average spent on lunch alone is $37 a week, or $2,000 a year.

The survey found noticeable workplace spending differences by gender and age. Men spend $46.50 a week while women spend $26.50 on lunches.

Americans spend more money on their lunches than on their commuting costs, which was an average of $123 a month, or $1,500 a year.

Accounting Principals asked Braun Research to conduct a telephone survey of 1,000 employed Americans, 18 and older, from Dec. 22 to 27. The survey found men tend to purchase and spend more on coffee than women, 54 percent and 45 percent, respectively.

Half of Americans buy coffee regularly at work, spending more than $20 a week, or $1,000 a year. Younger professionals ages 18 to 34 spend nearly twice as much on coffee -- $24.74 -- during the week than those ages 45 and up -- $14.15.

The average tax refund in 2011 was $2,913, according to Yahoo! Finance.

Americans are not planning to use their year-end bonuses on food or drink, however. The survey found 57 percent of employed Americans plan to use their year-end bonus to pay off debt.

And, according to the survey, one-third of employees have a financial goal of bringing their lunch to work in 2012.

Copyright 2012 ABC News Radio

Wednesday
Aug312011

Dollar Store Secrets: What to Buy, What to Skip, How to Save

Spencer Platt/Getty Images(NEW YORK) -- America has become a dollar store nation. No matter how much we earn, we all want to save. Dollar stores are booming in these tough economic times, attracting shoppers looking for low prices on necessities and the occasional small splurge.

In the past, people believed that dollar stores did not carry quality goods, but more and more people are discovering the incredible savings to be found at dollar stores.

With everything from cleaning supplies to baby clothes to food items, the dollar store is no longer a place to find knick-knacks and surplus goods. Good Morning America's Lara Spencer visited a local dollar store to show you how to save. This dollar store had all the same items as local competitors, but for 20 to 50 percent less. In a couple rare examples, the prices were the same, but nothing was more expensive.

Here are nine tips on how to stretch your dollar on your visit:

1. Make a List

Before you head out for your shopping trip, make a list of the things you need.

2. What Items to Buy

Paper products, household cleaning items, seasonal items (decorations, candy), craft items, baby clothes and non-perishable pantry items are some of the best things to pick up at dollar stores at a deep discount.

3. Ditch the Name Brands

Generic Brand vs National Brand. Many dollar stores carry the same national brands found in your grocery store or big box retailer. (Laundry detergent is one example.) Some generic brands found in dollar stores can be just as good as leading brands, especially for things like sponges or cleaning tools.

4. Cut Your Coupons

A lot of dollar stores honor manufacturer coupons, which is savings on top of savings.

5. Check Expiration Dates

Be sure to check expiration dates.

6. Avoid Tampered Packaging

Over-the-counter drugs are a real bargain at the dollar store. It is extremely important to always check the label and to make sure there are the appropriate vitamins and ingredients in the medicines. Also, be sure to take a look at the packaging and that it hasn't been tampered with.

7. Get the Best Batteries

When looking for batteries make sure to note that the best batteries have lithium.

8. Think Before Buying Electronics

Be careful of electronic equipment at dollar stores. Look for the UL label, which stands for Underwriters Laboratories Inc. UL is an independent product safety certification organization. If the product does not have the UL label, it could cause fires or other damages.

9. Leave the Kids at Home

Don't take your kids with you to the dollar store. It is hard to stick to a list with so many great deals as it is, and your kids will tempt you to buy even more things that you don't need.

The neighborhood dollar store may become one of your favorite places, and will save you a lot of money.

Copyright 2011 ABC News Radio

Friday
Aug122011

Big Inflow of Deposits for US Banks; Savers, Investors in for Disappointment?

Adam Gault/Thinkstock(NEW YORK) -- Experts say it's not 2008, and consumers shouldn't lose sleep over the safety of their money in the bank. They should, though, expect lean years ahead both for investors and account holders.

"Our banks are still a safe place to keep your money, you're just not going to get much interest. The bank stocks might not be such a safe place to keep your money," says Mike Mayo, managing director, banks, for CSLA.

Stocks of the biggest U.S. banks showed modest gains Friday, continuing their rebound from Wednesday's nosedive. By late morning all the following were up: Bank of America (2.3 percent), Citigroup (2.74 percent), Wells Fargo (0.8 percent) and HSBC (1.4 percent). J.P. Morgan Chase declined 0.1 percent.

Richard Bove, an analyst with Rochdale Securities, says big banks have been benefitting from a massive infusion of money in recent weeks. Corporations and individuals pumped some $100 billion into bank deposits in the last week of July. He expects to see as great or greater an amount for the first week of August. Where's the money coming from? In large part from people selling bank stocks.

"It's ironic that at the same time people are selling bank stocks like crazy, because the're worried about issues X,Y and Z, that they're putting the money from those sales into the very same banks, as deposits," says Bove. Of the $100 billion amount, he says: "That's never happened before. In the week after 9/11, $120 billion was deposited, but it came right back out very rapidly."

He says that except for that deposit, there's been nothing comparable since 1975. "All of it," he says, "is concentrated in bank checking accounts."

"It's a massive contradiction: Selling bank stocks, and then putting the money in the bank." But it's a contradiction he thinks will not persist: This gesture of confidence by depositors cannot help but redound, eventually, to the banks' share prices. "Ultimately, it will filter back into the stocks."

As for bank safety, he says, "No market is going to collapse with this much liquidity."

"One word -- volatile -- is the only word you need to know when it comes to bank stocks," Mayo said.

Major bank stocks had nosedived Wednesday and then bounced back Thursday, with Bank of America up seven percent after declining 10.9 percent on Wednesday, and Morgan Stanley up 10.7 percent following the previous day's 9.6 percent tumble. The sharp dive Wednesday was largely tied to rumors that French bank Societe Generale was in trouble.

Despite the bounceback Thursday, analysts said there are still long-term underlying worries about banks big and small, in part because of their ties to troubled European financial institutions. "In the U.S., five or six banks are directly affected by Europe; 7,000 never loaned a dime to Europe but are tied in through agreements with the big banks," says Rochedale's Bove.

He said sovereign debt woes in Europe will affect the ability of our banks to generate earnings. "The banks in the U.S. will lack the ability to fund growth in the U.S. economy. We're making it a fortress," Bove said of the banking system. "It's not going to go under, but it's not going to make a lot of money."

Copyright 2011 ABC News Radio







ABC News Radio